CARDINAL HEALTH ACQUIRING WACO WHOLESALER BEHRENS FOR OVER $40 MIL.

CARDINAL HEALTH ACQUIRING WACO WHOLESALER BEHRENS FOR OVER $40 MIL. in a transaction comprising mainly a stock swap but also some cash. The agreement provides Dublin, Ohio-based Cardinal Health and its growth-through-acquisition strategy "with an exceptionally strong presence in the retail pharmacy segment" in the fast-growing Southwest. Waco, Tex.-based Behrens' presence in that market will "complement Cardinal's existing presence in the hospital and managed care segment in the Southwest," Cardinal Health Chairman and CEO Robert Walter said May 23.

Privately-held Behrens is described by Cardinal as a 116-year- old wholesaler serving Texas and parts of adjoining states. The company's wholesale business is split about 80% to independent retail pharmacy and 20% to hospitals.

Roughly 10% of Behrens' business is in over-the-counter drugs and health and beauty aids.

Behrens also operates a third-party prescription drug claims business with a network of more than 1,100 pharmacies in 32 states, Cardinal said. Behrens operates out of a 135,000-square- foot distribution facility in Waco. Annualized revenues at the family-run business are approximately $185 mil. Cardinal's annualized revenues are about $6 bil.

Behrens President William Clifton added that the prescription drug distribution business operates in Texas, the eastern third of New Mexico and the border of Oklahoma. The third-party claims business, also called Behrens, has more than 200 contracts in force in 30 states, he said, with 60,000 Rx claims filled per month. The main area of contract filling is in Texas, Arkansas, Oklahoma, Mississippi and Kansas.

Behrens has 167 employees, including its sales force. The principals who will remain after the regulation are William Clifton and his brother James Clifton, the chief operating officer. Their sister, Mary Lacy Chase, owns the other third of the business but has not been active in its operations as of late. The 10 senior management officials will receive two-year contracts. The Behrens deal, subject to regulatory approval and customary conditions, is expected to be completed in July.

Discussing the decision to be acquired, Behrens' William Clifton said Cardinal will provide "accessibility to strategic health care providers that will form the networks and alliances which will compete for prescription business" under health care reform. Cardinal chief Walter pointed to the company's modern distribution facility as an attraction.

Cardinal has said it is considering merging some of its recently acquired distribution facilities, particularly in light of the Jan. 27 completion of the acquisition of Whitmire, which was first announced in mid-October of last year ("The Tan Sheet" Oct. 18, 1993, p. 3). Whitmire has 27 distribution sites nationwide. Four are located in Albuquerque, Dallas, San Antonio and Houston. It is possible one or all of those could eventually be merged into Behrens' 135,000-square-foot Waco center.